Construction and services firm Interserve has said that its recovery plan is “on track” as it reported a £6 million loss.

The company made the loss in the half-year ended June 30, as compared with a profit of £24.6m during the same period last year. Revenues were down 9.7% from £1.64 billion to £1.49bn.

Construction made an operating profit of £5.6m from revenues of £396m on ongoing business but results were dragged down by legacy contracts.

Interserve said it will complete and hand over problem energy from waste (EfW) contracts by the end of this year.

Under its ‘Fit for Growth’ programme, the company is targeting to make between £40 million and £50m in yearly savings by 2020.

Interserve said this would deliver £15m in savings in 2018, with £8m saved in the first six months of the year.

Net debt at the business as of June 30 was £614.3m and Interserve expects to pay £80m in interest costs this year on all of its loans.

Chief executive Debbie White said: “The first half of 2018 was an important period for Interserve as the new management team took actions to bring stability to the business and agree the direction of the group’s future strategy. The ‘Fit for Growth’ initiatives we are implementing are delivering material cost savings and will result in a simpler, more focused and more effective Interserve. The refinancing that we completed in April provides a firmer financial footing from which to execute these plans.

“Today we have a strategy that provides a clear direction, leveraging our areas of strength, where Interserve can provide compelling customer propositions, delivered with rigorous operational and financial discipline. Whilst there remains a significant amount of work to do, we have energy and momentum in the business as evidenced by the significant new contracts wins secured in the first half of the year.

“First-half trading performance was in line with our expectations. We continue to make progress on the resolution of our EfW projects, although risks to the programme still remain. We believe that the benefit of the actions taken in the first half underpin our unchanged full-year expectations, as we make further progress with the implementation of the group’s strategy and the Fit for Growth transformation programme.”